Addressing the Skilled Labor Shortage

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Continued strong demand for new homes has fueled a growing challenge for homebuilders: a shortfall of available workers.

The construction industry has lost more than 2 million skilled and unskilled workers since its peak employment levels in 2006, according to the Harvard Joint Center for Housing Studies.

An estimated 30 percent of construction workers left the industry following the Great Recession, and many haven't returned. At the same time, older generations of craftsmen are aging out of the workforce, while younger generations are slow to replace them. In the next decade, more than half of all construction business owners are expected to retire. 

Millennials now represent the largest share of the American workforce, yet workers age 19-34 represent a declining share of the skilled labor workforce. And only 3 percent of young adults say they want to go into the construction trades when they start their career, according to the National Association of Home Builders (NAHB).

In a recent NAHB survey, 84 percent of homebuilders identified the labor shortage as one of their two biggest challenges (building material prices was the other one). In contrast, just 11 percent of builders rated labor as a significant problem in 2011.

But several industry organizations and advocates are stepping in to help address the labor shortage.

To encourage young people to join the trades, This Old House launched the Generation NEXT campaign. The initiative raises awareness of the skills shortage and generates funds for the mikeroweWORKS Foundation’s Work Ethic Scholarship Program.

The International Brotherhood of Electrical Workers (IBEW) and National Electrical Contractors Association (NECA) launched a grassroots campaign that involves engaging with school principals, posting videos aimed at teenagers on social media, and reaching out to parents and educators.

And the Skilled Labor Fund is an industrywide effort to raise funds to address the shortage of skilled labor entering the residential construction market. Part of the National Housing Endowment, a 501(c)(3) Foundation, the organization presents money it raises to accredited training schools as scholarships.